The Affordable Care Act (ACA), signed into law in 2010, brought significant changes to health insurance, especially for young adults. It made health insurance more accessible and affordable for many, including those in their 20s who may otherwise struggle to find coverage. Here’s how the ACA impacts young adults’ health insurance:
1. Staying on Parents’ Plan Until Age 26
- One of the most notable provisions of the ACA is that it allows young adults to stay on their parents’ health insurance plan until they turn 26. This applies regardless of whether the young adult is living at home, attending school, or financially dependent on their parents. It’s a huge benefit for many who may not be able to afford their own insurance yet.
- This rule applies to both employer-sponsored and individual plans, making it easier for young adults to stay insured while they transition to adulthood, complete their education, or begin their careers.
2. No Pre-existing Condition Exclusions
- Before the ACA, young adults with pre-existing conditions (such as asthma or mental health issues) could be denied coverage or face higher premiums. The ACA banned insurance companies from denying coverage or charging higher premiums due to pre-existing conditions. This makes it easier for young people to get health insurance, even if they have health issues that might otherwise have been a barrier to obtaining coverage.
3. Access to the Health Insurance Marketplace
- The ACA established health insurance marketplaces (also known as exchanges), where individuals can shop for health insurance plans. Young adults who don’t have access to employer-sponsored insurance or a parent’s plan can buy insurance through these marketplaces. Depending on income, they may qualify for subsidies that can significantly lower the cost of their premiums and out-of-pocket expenses.
- This has made health insurance more affordable for many young adults, especially those who are just starting their careers or are self-employed and don’t have access to group health insurance.
4. Essential Health Benefits
- Under the ACA, all health insurance plans, whether bought through the marketplace or employer-based, must cover a set of essential health benefits. These benefits include:
- Preventive services (such as immunizations, screenings, and annual checkups)
- Maternity and newborn care
- Mental health and substance use disorder services
- Prescription drugs
- Emergency services
- Hospitalization
- Rehabilitation services and devices
- Laboratory services
- Pediatric services
- This ensures that young adults have comprehensive coverage, not just for emergency care but also for preventive services that can help maintain long-term health.
5. Free Preventive Care
- The ACA requires most insurance plans to cover preventive services without charging a copayment, coinsurance, or deductible. For young adults, this is a significant benefit, as it includes services such as vaccinations, screenings (like cholesterol and blood pressure checks), and counseling for healthy behaviors (like smoking cessation). These services are crucial for maintaining good health and preventing chronic conditions in the future.
6. No Gender-Based Pricing
- Before the ACA, women often faced higher premiums than men, as insurers considered gender as a factor in determining rates. The ACA prohibits this practice, meaning young women now pay the same rates as men for health insurance. This helps ensure that all young adults, regardless of gender, can access affordable coverage.
7. Coverage for Mental Health and Substance Use Disorders
- Mental health is a critical aspect of young adult health, and the ACA ensures that mental health and substance use disorder services are covered as part of essential health benefits. This includes services like counseling, therapy, inpatient care, and addiction treatment. For many young people, this makes seeking help for mental health issues or substance use much more accessible and affordable.
8. Premiums and Subsidies
- The ACA established a sliding scale of subsidies based on income to make health insurance more affordable for people under 65. If you’re a young adult with a low or moderate income, you may qualify for premium subsidies that reduce your monthly premium payments. These subsidies can make the cost of health insurance significantly more affordable, especially for those just starting out in their careers or education.
9. Young Adults Are Considered “In the Market” for Coverage
- Before the ACA, young adults often found themselves in a health insurance limbo after aging out of their parents’ plans. The ACA helped address this by making sure that they could either stay on their parents’ plan longer (until age 26) or access more affordable plans through the marketplace. This helps bridge the gap during the transition into full adulthood, allowing young people to maintain insurance while they pursue education or early career opportunities.
10. Short-Term Plans & Scams
- The ACA reduced the risk of young adults purchasing low-quality short-term plans, which were previously a common alternative for young adults seeking affordable coverage. These plans often had limited benefits and could exclude essential coverage, leaving young people vulnerable to large out-of-pocket expenses. The ACA ensured that most plans offered more comprehensive coverage, offering protections against such pitfalls.
Challenges Despite ACA Protections
While the ACA provides many benefits, there are still challenges for young adults:
- Affordability: Even with subsidies, some young adults may still find health insurance to be expensive, especially those who don’t qualify for financial assistance or who are just starting their careers.
- Gaps in Coverage: Some young people may opt for cheaper, minimal coverage plans or no coverage at all, especially if they are healthy and don’t anticipate needing medical care. However, this can leave them vulnerable to high out-of-pocket costs if they need care unexpectedly.
Conclusion
The Affordable Care Act has greatly improved access to health insurance for young adults by allowing them to stay on their parents’ plans, providing affordable marketplace options, and requiring comprehensive coverage with no exclusions for pre-existing conditions. These provisions help young people stay covered during a critical stage of their lives—whether they are in school, starting a new job, or figuring out their next steps. While there are still challenges related to affordability and coverage gaps, the ACA has made significant strides in making health insurance more accessible and affordable for young adults.
